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Written Statement of C. Don Babers
HUD-Appointed Receiver
Chairman of the Board
Housing Authority of New Orleans
Hearing before the Committee on Financial Services
Subcommittee on Housing and Community Opportunity
U.S. House of Representatives

February 22, 2007

�Solving the Affordable Housing Crisis in the Gulf Coast Region Post Katrina:
Why no progress and what are the obstacles to success?�

Chairwoman Waters, Ranking Member Biggert, distinguished Members of the House Committee on Financial Services it is a privilege to appear before you today on behalf of the Housing Authority of New Orleans (HANO).

I am Don Babers, the HUD-appointed receiver and Chairman of the Board for the Housing Authority of New Orleans. I have been directly involved in the recovery plans of New Orleans's public housing since last spring.

The demolition and rebuilding of public housing in New Orleans did not start with Hurricane Katrina. The discussion on how to offer a better public housing alternative in New Orleans started in the late 1990's when the majority of HANO's public housing units continuously failed HUD's physical inspection standards.

Despite millions of dollars appropriated for extensive rehabilitation and modernization, only 5,000 of the 7,000 public housing units were habitable prior to Hurricane Katrina. Of those 5,000 units, many needed extensive work just to bring them up to an acceptable living standard.

In 2002, HUD took over the Housing Authority of New Orleans, cleaned up its books, and embarked on an ambitious $700 million rebuilding plan. HUD envisioned the creation of new, safe neighborhoods with homeownership opportunities for anyone who wished to pursue the American dream, including public housing residents. Since HUD took over, 1,000 affordable housing units have been or are being built at Fischer, Guste, Florida and St. Thomas and another 300 are underway at Guste, Fischer and St. Thomas.

Litigation and public debate about new construction has slowed the rebuilding progress. We have had every form of architecture expert here assessing the bricks and mortar of the public housing units.

Those experts have not addressed the toll of the crime-plagued, racially segregated, public housing units. Both factor into HUD's evaluation of the densely built, decades-old housing and our decision to rebuild.

Hurricane Katrina struck the city while HUD's receivership team was in the midst of redeveloping New Orleans' worst developments. Outwardly the homes appear to have survived the storm. It is when you evaluate the inside of the homes, the electrical wiring, the plumbing systems, power receptacles, the roof structures, the mold, and the overall infrastructure damage, that one comes to realize the time for change is now.

We believe now is the time for a variety of reasons:

The cost of renovating the public housing units is not cost effective.

  • Our engineering firm estimated it would cost $129.5 million to make only Katrina-related repairs to St. Bernard, B.W. Cooper, C.J. Peete and Lafitte.

  • Extensive modernization of St. Bernard, B.W. Cooper, C.J. Peete and Lafitte to correct all pre-existing deficiencies and code violations would cost approximately $745.2 million

  • Demolition and the redevelopment of similarly configured homes would cost $597 million.
It would be an irresponsible use of taxpayer dollars to follow any other path, which is why we came to the conclusion that redevelopment, was the best option on so many levels.

Economically, HANO is poised to rebuild affordable housing by 2009:

HANO was awarded approximately $300 million in tax credit equity to redevelop St. Bernard, B.W. Cooper, C.J. Peete and Lafitte. The projects include the development of nearly 2,100 affordable housing units that collectively have a total development cost of approximately $540 million including approximately $300 million in tax credit equity. This funding could be lost due to the Dec. 31, 2008 deadlines.

Chairwoman Waters, Ranking Member Biggert, distinguished Members of the House Committee on Financial Services, whether you agree with our plan or not, you should know we are in this fight solely to provide a better tomorrow for all New Orleans public housing residents. Repairs may be cheaper and more expedient in the short run where costs are measured in dollars, but in the long run, where costs are measured in lives, they are too great.

While, HANO has been charting the course ahead, we have also worked hard to ensure all former residents of New Orleans public housing are receiving a rent subsidy. We are also working, where possible, to bring residents back to safe environments. Thus far we have over 1,200 families residing in public housing. We are calling other families and advertising for all others to keep us apprised of their situation in the anticipation of rapidly returning over 2,000 families.

At a previous hearing on public housing in New Orleans, HUD was asked why it took so long to demolish units previously identified to be razed. After years of empty promises, HUD went to court to be allowed the opportunity to improve public housing in New Orleans and, progress was well underway prior to Katrina.

We realize that years of mistrust of HANO have left many doubters. As proof that such a revitalization plan can work, we'd ask that you look to a neighbor to the east, Atlanta. Last week, Atlanta announced plans to raze most of the remainder of its distressed public housing units and redevelop those communities.

Atlanta previously has demolished 13 public housing developments and replaced them with affordable, mixed-income communities.

Georgia Tech tracked families both affected and unaffected by revitalizations and found those affected were much better off. Among the results were:

  • Affected families had higher employment rates, made more money and enjoyed a higher standard of living.

  • Affected families have benefited from the opportunity to live in a safer, healthier environment and to break the cycle of poverty.

  • Neighborhoods have benefited from lower crime, elimination of blight, and the restoration of thriving communities that attract new investment.

  • Affected children and their families' benefit from better schools, which are integral to the transformation.

That same transformation could occur here if we are given the opportunity. In fact, a transformation is underway across the Mississippi River Bridge. If you visit the newly completed Fischer complex and you talk to the residents there, you'll hear the voices not heard during this debate - families who are excited to reside in a new, safe community.

During my time here, I've truly grown to admire and respect the perseverance and passion of the Katrina survivors who are fighting to return home. While sometimes it may seem like we are miles apart, when you really think about it, we aren't. Our goal is the same - to return them safely to New Orleans. The difference comes with the discussion of what they will see when their journey home ends. We believe they deserve better than the crumbling "bricks" and we believe this moment in time is providing us with an opportunity to make their community better, not only for them but for the generations to come. The question before us is: if not now, when?

Madame Chairwoman, Members of the Committee, thank you for the opportunity to touch on a few components of our housing strategy. I want to reassure the committee that HUD and HANO are fully committed to bringing all of New Orleans' public housing families back to the Crescent City.

Thank you again and I look forward to discussing the complex public housing issues with the committee.

Content Archived: June 25, 2010

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